TABLive - Videos and Audios Downloads

ANZ's Evans: "Compliance is front and centre of any business decision we make"

Mark Evans, managing director of transaction banking at ANZ, gives an update on the bank's business performance and roadmap. He also highlighted the importance of cooperation in solving financial crimes in the wake of digitisation.

Mark Evans explains that ANZ’s current strategy in transaction banking involves following its customers in the jurisdictions in which they operate

He believes there are a lot of opportunities for Australasian corporates in providing services such as engineering and construction

Banks have a critical role both in facilitating business and helping ensure that there is a robust financial system

Here is the transcript

Mark Evans: As you would know, ANZ has a strategy, we're very strong in our home markets in Australia and New Zealand but we're also a very international bank. Certainly, outside Australasia, we're represented in 34 different countries around the world and predominantly in Asia and in the Pacific. Now our strategy is to follow the needs of our customers, following trade flows through the cardholders in our home markets of Australia or New Zealand as well as foreign investments. So, our strategy in transaction banking is to follow our customers in the jurisdictions in which they operate. Following those flows and helping them out with possible of putting things in the supply chain.

So, it's very interesting people make the mistake of assuming Asia is one geography and one business culture. And of course, it's not. Every geography is different. But what we are saying is it continued an increasing interest from our customers in our home markets of doing more business in Asia; whether that's exporting opportunities into the various markets in Asia; whether that's resources also increasingly looking at food, beverage, every culture the opportunities to provide and support services particularly hospitality. And increasingly as large infrastructure projects are taking off in Asia, predominantly on the back of Belt and Road initiatives, we're seeing a lot of opportunities for our Australasian corporates in providing services such as engineering and construction.

What we’re also saying is for the first time in a number of years, certainly the pipeline of deals is increasing so we've been waiting for companies to exit the, what was classified as the Asian trade recession. What we are starting to see is, there is a lot of talk of that last year that didn't necessarily translate into what we saw going through our customers' books. They were still quite nervous after a number of external events such as Brexit and the US election. It just created that little bit uncertainty of what was going to happen with TPP. But we are starting to see that confidence come back now and the pipeline starting to build some, I’m optimistic that will see increasing flows in 2018.

Areas that really help us differentiate ourselves where our customers can use us best. We don't want to be just a commodity, banking commodity. We very much see our role particularly given that we have such an institutional focus in Asia as providing advisory and support for our customers as they go into those markets. A lot of what we bring is actually local knowledge and expertise to the teams on the ground.

We have a number of options in that space. It's not one platform that we use. Certainly, our back office, we’re continuing to consolidate and have a common platform way possible that helps us give customers when they bank with ANZ and they follow us into the region;they still want to have an ANZ experience. So, consolidation and simplification of our back-office systems help enable that. There is no point with them banking with ANZ in Australia and having a completely different experience in China – that, doesn't work. But we've spent a lot of time consolidating and simplifying that removes operational risks and helps us deliver a consistent service. But we're also focusing very much on expanding the capabilities. We have an omni-channel approach and that is we want one internet channel through which our customers can service their cash management needs wherever they bank with us, they trade needs, they lend needs. They can receive insights and analysis and ultimately, it'll put their market's business efforts and exchanges onto that channel, as well. So that's an evolving phase. Concurrently, we have the opportunities obviously, and the capability to provide host-to-host, direct linking into customers they appease.

It's quite different to what you see going through European trade flows and North American trade flows. Our home markets don’t generally... they certainly look for open accounts solutions. The continuing decline the usage of traditional trade products like letters of credit collection. I don't see that decline abating. They are still being used for years to come but the majority of business is being moved to open account. But, unlike what you've seen in the northern hemisphere, the flows that we have seen in our home markets of Australia and New Zealand, predominantly open account but not programme driven. So, there is still demand for payables programmes and receivables frame but they are select. Really the opportunity is for us to intermediate ourselves into the trade flow, into the supply chain, but financing the traditional open account-type working capital facilities like a trade line. So, rather than calling it supply chain as a programme, it's sort of event-driven financing. And get them understand where the risk is, making sure that the working capital we provide to support that trade is truly aligns beyond the line of the capital needs of the customer.

You can't overstate the importance of compliance with rules, regulation, and public's expectations. So, banks have such a critical role both in facilitating business but also helping to protect and ensure we have a robust financial system. So, today, people are thinking, there's a business over here and there's compliance over here that is ridiculous. Compliance needs to be front and centre in any business decision we make, in any offering we make to our customers. So, you need to get a quick compliance outcome, not just a sale and worry about compliance later. So, we’ve been working on that, we've been on that path many years now. And the idea is they are linking together. So, areas of money laundering, it continues to move. The issue is that, in isolation no one bank can stop money laundering. The reality is that we working together as an industry, and with our regulatory colleagues and law enforcement,and educating the public are the best form of defence against money laundering, terrorist financing, even bribery and corruption that are increasingly critical. We have a role to play in detecting tax evasion. All important things as way as a bank as a trusted member of society has a role to play.